Motor Vehicles and Taxes
Lore has it, incorrectly so, that the tenencia tax levy on motor vehicle ownership was introduced in Mexico with the goal of financing the 1968 Olympic games and remained on the books for decades.
As of 2018, with car registrations reaching a historical high, a majority of Mexican households (51.3%) did not have a car or truck in their possession.
However, during the administration of President Felipe Calderón, a process was kicked-off whereby the fiscal burden on motor vehicle ownership in Mexico has substantially diminished.
In a country with serious problems of inequality, the demise of the tenencia (which is based on the asset’s value) is a very unfortunate development in fiscal policy. Taxes on motor vehicle ownership are sensible because they are fiscally progressive, efficiently collected and create appropriate incentives regarding decision-making in matters of urban development and environmental sustainability.